Ego Free Leadership

by Brandon Black

  “These societal problems are both personal and collective,” Peter Senge says. “Like droplets of water making tracks in the soil, they start with a few individuals. But the water that comes after follows those tracks until it becomes a river. Then not even the most heroic individual can change the direction by him- or herself.

  “The danger of this thinking lies in concluding that there is nothing an individual can do,” he continues. “Brandon’s story is a beautiful example of how one person can influence the collective.”

  LaL cofounder Claire Nuer taught that “each of us has the possibility of being a rock that changes the course of the river.” When we make good, our behavior allows others to be more aware of what type of river we’re all forming—and every time we do it, it makes a difference. Brandon’s empathy and vulnerability opened a quality of dialogue that allowed opposing groups to create an initial foundation of trust. He grasped the legitimacy of the nonprofits’ point of view, and shared his own in a way that allowed them to see Encore’s employees as well-intended, imperfect humans vs. agents of evil. Wanting the nonprofits to see Encore differently began with Brandon behaving differently.

  Brandon found this clarity and courage through caring about the context Encore was creating. He was hoping his commitment would build a bridge with the coalition of nonprofits. He didn’t suspect that his holistic mindset would give him and his team insight and inspiration that would electrify their workforce and differentiate their company.

  BRANDON

  Upon our return from New York, I charged a task force with examining our operations to identify any other unintended consequences like those the coalition had raised and to recommend changes that could make our processes more consumer-friendly. Greg Call, our associate general counsel, and Ashish led it. In mid-August, Paul and I met with them to review their conclusions.

  Their most important recommendation focused on addressing the fear, confusion, and distrust consumers felt toward the collections process. They wanted to clearly lay out people’s options in a Consumer Bill of Rights. They believed we could change the dialogue between consumers and debt collectors by publicly declaring our intentions and commitments. I had been expecting suggestions for operational changes and maybe a consumer help page on our website. I loved how ambitious their vision was.

  Once it was clear Paul and I bought in, they urged me to consider making this an industry-wide effort. They believed a broad, inclusive vision could begin to change the spirit of discussions with the legislative and regulatory entities examining our industry.

  I thought a Consumer Bill of Rights would resonate with Jim and the nonprofit coalition, but I was hesitant to expand the universe of participants. The proposed changes were well above and beyond what was required by the law. Encore was finally going to be viewed in a favorable light and—I hoped—I was going to be the subject of a positive news article. Why would we let other people in the industry get the benefit of our initiative?

  “Because this isn’t about you or Encore,” said Greg. “This is about establishing a new paradigm for collections. We can’t do that alone!”

  He was right. Greg, Ashish, and the task force would begin drafting the principles of the Consumer Bill of Rights while I tried to schedule a meeting with our remaining competitors.

  I couldn’t remember a time when the leaders of our industry got together for a beer, let alone to tackle an important topic. If it happened, I wasn’t invited. I realized my deeper reluctance to contact my peers came from the worry they wouldn’t be interested. I’d look weak and inept to my team if everybody blew me off. But I could hear Shayne’s voice: “So what if they reject you? Is that more important than improving the industry?”

  I made the calls, suggesting an upcoming conference as a venue to meet. To my surprise, they all flew out a day early to talk about an industry-wide Consumer Bill of Rights. We were all worried about the looming regulatory pressure and wanted to get ahead of any reactive legislation. Unfortunately, when one company agreed with one of our proposals, another didn’t, and vice versa. Despite hours of negotiating, we couldn’t align on a single basic change—much less some of the more radical ideas that Encore wanted to pursue.

  Greg looked over at me mid-afternoon. “We’re wasting our time here,” he said. I nodded in agreement.

  We had more success with the nonprofit groups. They reviewed our proposals and suggested edits. We couldn’t resolve all our disagreements, but both teams worked diligently. I was amazed that only a few months prior our entire relationship consisted of unproductive shouting matches. Now I was grateful for how they engaged with us: Their contributions were key. By December, we had almost finalized the document. Our last major hurdle was related to stopping some long-standing industry practices.

  “There are three items in the Consumer Bill of Rights that could negatively impact revenues,” I recapped for Paul and Greg in a final review meeting. “No longer reselling consumer accounts to other collection companies; eliminating all fees and interest for people on payment plans; and granting permanent relief from future collection efforts for people who are unlikely to ever recover financially.”

  “Were our statistical analysts able to quantify the financial impact?” asked Paul.

  “No,” I responded. “They’ve tried to simulate consumer behavior after the changes, but there are too many assumptions to create anything accurate. We could lose money, break even—there’s even a chance we’ll collect more. It depends on what you believe.”

  “The fact that no one else in the industry wanted to join us does give me pause,” said Greg. “This is a one-way street, you know. Once we make these changes, there’s no going back. We would get hammered by the press.”

  “Does that mean you’re against it?” I asked.

  “No, just the opposite. I want us to take a stand and set the standard for the industry. But we can’t view these commitments as temporary. For us to gain people’s trust, we need to stick to our word.”

  I felt torn. I wanted to change the collections process for consumers, but I also had a responsibility to the business. What if this backfired?

  “One of the big things we learned last summer was that our customers don’t understand or trust the collections process,” Paul summarized. “When they keep getting charged interest, they feel like they can never pay it off. So they avoid the whole system.”

  “We all lose,” Greg agreed. “They don’t get out of debt, and we spend even more money trying to track them down.”

  “So we change the paradigm and deal with them straight up,” I said, finishing up the logic we were talking ourselves through. “No hidden tricks. We act on the belief that if we’re caring and trustworthy, they’ll deal with us first. We also give them the comfort that they will only ever have to work with us. We won’t resell their debt, and they won’t have to tell their story over and over again to other companies. More people, more quickly, move out of debt. Our collections are at least as good, and our account managers feel better about their work.”

  “As a person, I want to make these changes,” Paul said. “But as CFO, I’m worried. We do larger deals with more preferential pricing than most of our competitors. That gives us the ability to turn around and sell some accounts for a profit. Giving that up could be a big deal.”

  We were silent for a few seconds, and then Greg said, “We’re taking the chance that consumer trust is worth more.”

  The three of us looked at each other, and nodded.

  Our plan was to announce the Consumer Bill of Rights shortly after our earnings release in February 2011. We reached out to the nonprofit coalition one more time, wanting to put out a joint press release.

  “You have to understand,” Jim said. “We’re uncomfortable endorsing anything that suggests alignment with or sympathy toward your company. You can mention our contribution, but please don’t use our name.”

  I understood their concerns, but felt let down. We were missing an opportunity t
o demonstrate that it was possible to bridge breakdowns between companies and stakeholders.

  In total, the Consumer Bill of Rights laid out thirty-six core principles that our consumers could expect from Encore. We didn’t just agree to comply with the law; we agreed to be held to a higher moral and ethical standard.

  CHAPTER 9

  TELL ME AGAIN, WHAT GETS

  YOU UP IN THE MORNING?

  The Inspiration of a Noble Goal

  BRANDON

  Encore India had a fantastic year in 2010. To my surprise, however, our success was met with outright skepticism. Many analysts, lenders, and investment bankers found our performance too impressive to believe. When they spoke to companies in the industry, our results were mocked with incredulity. Most, if not all, of our competitors had tried similar strategies and failed miserably. What could Encore be doing that was so unique? People seemed to think we were succeeding through some kind of sleight of hand.

  We needed to demonstrate India’s contribution in a different way, so we leveraged the adage “A picture is worth a thousand words.” We invited our key constituents to participate in a two-day meeting in India in late January 2011 designed to showcase our world-class management team, employees, and facility.

  Even in 2011, many Americans still had the impression that agents calling from India had thick accents and limited education. Our reality was totally different. Virtually all of our call center agents had begun learning English from a young age and had a college education. They could communicate just as effectively as our agents in the United States. The collection results spoke volumes.

  ENCORE INDIA COLLECTION REVENUE (2007–2010)

  After some introductory comments from Manu, we let our guests wander around the call center floor for hours and gave them the flexibility to sit next to anybody they wanted to. No chaperones and no handpicked account managers. I was incredibly proud of what Manu and his team had accomplished, and what we had created together. I was betting our hard work would speak for itself.

  When our guests got back to the conference room, they were astounded by the professionalism and competence. They compared notes and shared stories about the people they met. It was an amazing moment of vindication, particularly for Paul and me. We had faced so much doubt and resistance—India had seemed doomed to fail so many times—and now, they had surpassed our wildest expectations.

  Our guests were particularly interested in our “One Team, One Dream” initiative, which kept coming up in their meetings. Manu hadn’t addressed the initiative in his opening remarks, so I took a few moments to describe how the initiative came about.

  I explained that Encore employees contacted consumers from our call centers: St. Cloud, Minnesota; San Diego; Phoenix; and New Delhi, India. We had hired more than six hundred new collectors in the previous eighteen months, mostly in India. Although excited about the growth and seemingly secure in their own jobs, the US workforces were still somewhat dismayed by the growing contribution coming from India. Tensions were down, but each center still operated as an island.

  “One Team, One Dream” changed all that. This wasn’t a corporate initiative—I didn’t even know about it until after it launched. It was a grassroots movement started by lower-level call center managers from the United States and India who wanted to connect our employees around the globe. Each operating site designated a champion, and these individuals traveled to the other sites and worked alongside local employees. Instead of seeing each other as faceless people halfway around the world, they wanted to bring out the human side of the workforce. These “visitors” were embraced as real people, and likewise gained an appreciation for their colleagues and the different cultures that they were exposed to during their travels. They shared stories, customs, and holidays. Indian employees celebrated the Fourth of July, and U.S. employees celebrated Diwali, the Hindu festival of lights. It was truly inspiring how many people had put aside their beliefs and fears to create a cohesive multicultural unit.

  One Team, One Dream had been fundamental to our success. The connection and mutual respect built between the different sites had become the foundation that allowed us to add new work departments in India. Besides the 1,500 collection agents within the four call centers, we now had hundreds of information technology personnel, analysts, and administrative staff. These new groups were performing critical tasks and providing us with an unprecedented ability to scale across our business.

  Many analyst reports documented their experience. Their validation of our strategy finally put to rest any remaining doubts about our success in India.

  I had one other significant moment during that trip. The flight home from New Delhi to San Diego takes about twenty-four hours from takeoff to touchdown. I often passed the time watching videos, playing games, or reading something inspirational. This time, however, I couldn’t concentrate on reading, and I turned my attention instead to a few TED talks I had downloaded. One of them was Simon Sinek’s video, “How Great Leaders Inspire Action.”

  One thing he was especially passionate about caught my attention: “It’s not what you do that matters. It’s why you do it.”

  It got me thinking. Why did we do this work at Encore? For the shareholders? To preserve the banking system?

  Those were true, but consumers caught in a web of debt didn’t care about shareholder profits. They were just trying to survive. Our Consumer Bill of Rights was a step toward identifying the why—the “inner circle” in Sinek’s video. But it still didn’t capture our essential purpose. What, really, were we offering our customers? What was the essential motivation at the core of our actions?

  Back at headquarters, we started having discussions as an executive team and from these we developed and circulated a series of statements. My favorite was “restoring dignity and creating a path toward financial independence.” Our account managers often spoke about how our customers felt trapped by past decisions and were looking for a way out. People in debt didn’t feel good about themselves, and the constant collection calls only reminded them that they hadn’t lived up to their promises.

  Although not yet fully articulated, this essential why began shaping how we interacted with our consumers and the very way we thought about our work.

  SHAYNE

  “People at Encore were jazzed by the Consumer Bill of Rights,” Brandon recalled. “It gave them a sense of pride about our company. I never saw that level of enthusiasm for quarterly results or a new strategy.”

  As Brandon and the team began humanizing their consumers, it expanded their ability to build authentic relationships with them. Instead of trying to extract money from debtors—which made Encore employees see others as obstacles to overcome and put them at the mercy—they focused on working with people in financial difficulty to help them get back on their feet. By making this shift they empathized with debtors and supported them. Instead of feeling righteous, ambivalent, or numb, many workers at Encore began to feel enthusiastic and at the source about their work.

  Their experience highlights a simple truth: Each of us has a powerful need to positively affect the people and world around us. This need and inspiration is what we call our “noble goal.”

  In its simplest form, our noble goal is our personal response to the question “What context, atmosphere, or environment do I want to create for myself and others?“ In the narrow, scarcity mindset of our egosystem, we lose our care for others and the broader perspective. We create environments of distrust, competition, animosity, and separation. But when we are connected to our noble goal, its clarity inspires us and guides us toward what we really care to bring about in the world, in all domains of our life—our families, our workplaces, our communities, and our society. It is our North Star, and it has the power to guide both our long-term direction as well as our moment-by-moment choices.

  Even if we haven’t yet put our noble goal into words, we all have this yearning inside us. If we look at our life, we can see it showing up in our actions. Bra
ndon’s noble goal, for example, was to “see every person as a human being in need of something.” This guided his decision to dialogue with the nonprofit groups who were critical of him. It was the instinct that led him to empathize with his consumers.

  When Amy took on the diversity challenge at Encore, it was as much for other women as for herself. Encore’s executive team supported the effort because they wanted to create a fair work environment. They just needed Amy’s courage to see that it was missing.

  This desire to elevate those around us is in our DNA, and the energy we feel when we act on this instinct elevates our focus, enthusiasm, and creativity to a new level. It gives us the courage to take risks we might not otherwise dare to. When Jim Syran walked the floor at the Phoenix call center during the layoff in 2007, he felt inspired to show up for others in a way that terrified him. Prioritizing our caring and empathy over our personal discomfort is characteristic of our noble goal. It helps us behave in ways that encompass the needs of everybody involved.

  An organization can have a noble goal too. This is frequently clearer for nonprofits or socially responsible businesses, whose mission is explicitly outward focused. Yet Encore’s example helps break a false duality when we talk about purpose: that what our company does is either inherently selfish or altruistic.

  When Brandon and his team created the Consumer Bill of Rights, it felt scary and risky to break the mold. But ultimately, they felt more inspired, and it empowered employees to act from this space of caring. Every interaction became an opportunity to create a context of trust and honesty. Morale increased and collections continued to grow.

  This more empathic approach inspired Encore’s VP of Marketing, Brian Enneking, to develop Encore Capital’s Consumer Yearbook, which chronicled their interactions with consumers. “I felt compelled to start the initiative even though it wasn’t one of my objectives,” Brian explained. “Executive leadership was encouraging us to think and care about the consumer, and they meant it. People believed it.”